Pope Benedict XVI has created a new oversight agency and approved
tough new measures aimed at ensuring that the Vatican’s bank and other
institutions cannot be exploited by those seeking to launder money or
finance terrorist activity.
The measures announced on Dec. 30 establish harsh penalties,
including jail time and fines, for Holy See employees and others having
financial dealings with the Vatican if they are found engaging in
financial misdeeds such as unlawful transactions, fraud or
counterfeiting.
The measures also outline penalties for activities such
as illegal arms distribution, drug dealing, and even environmental
pollution.
The newly created Financial Information Authority will police the
financial and commercial dealings of all Vatican agencies, including the
Vatican Bank.
The authority’s president and the governing council will be appointed
by the Pope to serve a five year term and will make an annual report to
the Vatican’s Secretary of State.
Criminal investigations and any
penalties would be carried out by Vatican City State officials in
cooperation with Italian authorities.
In an apostolic letter announcing the new laws, the Pope said the new
authority would help combat the "Inappropriate use of the market and
the economy" and the "terrible destruction of terrorist violence."
The
new controls and monitoring will enable the Vatican to ensure that
donations or investments by the Church are not rerouted to support
terrorist activity, a prospect officials are obviously eager to avoid.
The new laws will go into effect April 1.
The timing of these new provisions is not incidental. Investigations
in 2010 turned up the heat on the Vatican to raise the bar on its
financial practices to meet international standards.
Last June, Cardinal Crescenzio Sepe of Naples, was accused of giving a cut-rate real estate deal to an Italian politician who, in turn, approved state funds for the Church.
The former head of the Vatican's Congregation for the Evangelization
of Peoples denied the accusations, saying he acted with "maximum
transparency."
The Vatican's "bank," the Institute of Religious Works, is currently
under investigation by Italian authorities who froze 23 million Euros
(more than 30 million U.S. dollars) last September, citing suspicion of
money laundering.
The Institute's president, Ettore Gotti Tedeschi, has consistently
denied any misdealings and blames the situation on a "misunderstanding."
In October, the Italian court denied an appeal attempt and has not
yet freed up the sum due to the ongoing investigation.
The prosecutor's
office later stated that although the Vatican had expressed a will to
adopt international standards, there was "no sign" that it was going to
do so.
Tedeschi has made no secret of his wish to bring the Vatican up to
European Union standards against money laundering.
His aim is to have
the Vatican accepted for inclusion on Europe's "White List" for
anti-money laundering compliant states.
The Pope's new measure represents a major move in that direction. The
Financial Information Authority will be working in open association
with European agencies.
Vatican spokesperson Father Federico Lombardi hailed the stiffer measures as in a Dec. 30
statement.
They "cannot but be of benefit to the Church," he said. "Vatican
organizations will be less vulnerable in the face of the continuous
risks that inevitably arise in the handling of money."
Previous errors that caused scandal "will be avoided," said Fr.
Lombardi. The result, he explained, is that "the Church will be more
'credible' before the members of the international community, and this
is of vital importance for her evangelical mission."
In a parallel statement, the Holy See's Secretariat of State called
the new measures part of "efforts to build a just and honest social
order.
"At no time," the statement reads, "may the great principles of
social ethics like transparency, honesty and responsibility be neglected
or weakened."
SIC: CNA/INT'L